Ext 5001/41 'PERSIA – INTERNAL (Miscellaneous despatches).' [‎81v] (162/248)

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at the end of J une; sales of gold bars and of silver were undertaken at the same
time by the Persian Government, and close co-operation was established. Owing
to various causes, one of which was an inadequate supply of coins, it has not yet
been possible to carry out the scheme on the scale originally intended, and the
effect on commodity prices has not been noticeable. About £500,000 worth of
Persian currency has, however, been obtained in advantageous conditions for
His Majesty's forces. The offer of gold has also increased confidence in Persian
currency, and has probably led to some reduction in issues of fresh currency. The
price of sovereigns has fallen during the period of sales from 700 rials" on the
12 th July to 580 rials at the end of August. One hundred thousand Pahlavis
(equivalent to gold sovereigns) are being coined for British account, and, provided
the rather fickle market remains good at the reduced price, sales may be expected
to increase.
24. By the Currency Law of the 19th November, 1942, the metallic reserves
of the National Bank of Persia were revalued on the basis of 35 dollars per fine
ounce of gold and 23^. per ounce of silver, thus creating a substantial profit in
rials which has been carried to a special reserve. All new issues of currency after
the promulgation of the law must be backed as to 60 per cent, gold for sterling
or dollars convertible into gold and 40 per cent, sterling or dollars guaranteed
against depreciation in terms of gold. By a decree of the Council of Ministers,
No. 5922 of the 31st May 1943, the note-issue functions of the National Bank
are separated from its banking functions and the bank is divided into an issue
department and a banking department. After the separation the commercial or
banking section now has its capital fully paid up and its reserves appreciably
strengthened.
Civil Supplies.
25. Since 1941 imports of civil goods into Persia have been drastically
curtailed owing to the need to economise shipping. Persia tightened her belt
with a fairly good grace and even endured a reduction of imports which w T as
perhaps more drastic than that applied to other Middle Eastern countries.
Ordinary import and export trade virtually ceased, and it may be that the coup
de grace has been given by Dr. Millspaugh’s recent regulations declaring many
articles to be Government monopolies and restricting merchants’ profits on imports
to 5 per cent. There is no question, however, but that these measures were
necessary.
1 26. None the less, if there is now a prospect of more shipping and more
goods for the Middle East. Persia should be among the first to benefit. Increased
supplies of some essential civil goods are already believed to be in sight; more
tea has been offered from India, and the United States may be able to supply
cotton piece-goods and yarns. The organisation of road and rail transport is
improving, and this should be less of an obstacle to importation and distribution.
After her declaration of war against Germany, Persia will probably look to the
Allies for a more generous policy in this respect.
27. Persian industry is still in difficulties; transport is easier owing to the
allocation of some lend-lease trucks to factories and mines, but there is much
discontent among employees because of low salaries. This directly affects supplies
of civil goods, and the Anglo-American supply committees are consequently giving
all the help they can towards the maintenance of these industries.
T ran sport.
28. Road .—The Road Transport Department has been reorganised. An
American, Mr., Vivian, has replaced Mr. Birkle as director, and the staff has been
strengthened by the addition of several Anglo-Saxon assistants. The Millspaugh
Mission is showing keen interest in the welfare of the department and is
co-operating with the Road Transport Board in improving the control and
organisation of road transport. The department now has nearly 1,000 lend-lease
vehicles and (theoretically) about the same number of contracted vehicles. The
control of the latter is nebulous but will become better as organisation improves.
Lend-lease vehicles are being steadily distributed for the transport of cereals; and
coal and charcoal are being moved more or less according to plan. Unsuitable
tyres and the lack of spare parts and maintenance facilities handicap the efficiency
of the department’s fleet. The control of road transport in the provinces has
left much to be desired but should improve when the department has more staff.
29. Rail .—The allocation for civil supplies, excluding oil, amounts to
8,000 tons a month. The allocation for oil for civil requirements is 678 tons a
day. Oil stocks in Tehran are now substantial, with the exception of petrol,